Thomson

It’s a heck of a way to run a pre-election campaign. On the eve of an expected election, politicians usually spend their time playing up good news, downplaying the bad, shaking hands and kissing babies.

Municipalities fear being target of provincial budget cuts

“If you take away something that was never there in the first place, is that a cut?” Finance Minister Doug Horner asked Tuesday, referring to promised spending increases that might be axed.

Photograph by: Ed Kaiser
, Ed Kaiser

CALGARY — As the Tory government prepares to tighten its belt in the March 7 provincial budget, municipalities — including Calgary — are hoping it’s not them who will feel the squeeze.

Premier Alison Redford has repeatedly made a commitment to sustainable long-term dollars for municipalities, including a promised hike to the Municipal Sustainability Initiative (MSI), the province’s capital funding program for communities.

But Finance Minister Doug Horner noted Tuesday he has already said publicly that “everything is on the table” for potential cuts as the government faces a massive revenue shortfall.

“If I don’t have the money, I can’t do it,” he said of the government’s commitments.

Horner said he was not revealing what was in the budget, but also suggested that failing to come through with a promised spending increase should not be viewed as a reduction.

“If you take away something that was never there in the first place, is that a cut?” he said in an interview. “We have to be cognizant of the current financial situation we’re looking at.”

The municipal sustainability program is considered operating funding because it flows as unconditional grants to municipalities for capital.

The current budget earmarks $896 million for MSI this year, while the province’s business plan calls for $1.05 billion for 2013-14.

During last year’s provincial election, the Progressive Conservatives promised MSI funding would be further increased to $1.6 billion in 2014-15.

Redford — who announced Tuesday that Horner would deliver the budget two days after the legislature begins its spring sitting on March 5, about a month later than normal — told municipal leaders last fall the government would not balance the budget on the backs of municipalities.

In Calgary, Mayor Naheed Nenshi said Tuesday he takes the premier at her word but also acknowledged he was “a little bit worried about the future of capital programs.”

“If there is in fact a capricious cut to future capital grants, that’s not a costless thing,” he said.

“Extending the program costs us many millions of dollars in interest costs that do go to the operating budget as well as preventing Calgarians from building the infrastructure that they need.”

But Liberal MLA Laurie Blakeman warned municipal funding is one of the first places Progressive Conservative governments look for savings in times of financial trouble, with past promises going out the window.

“Given their history, I think they’re going to cut again,” she said.

“It’s such a large chunk of money that when they look through their budget ... they go ‘ah, municipalities.’ And it makes it a lot easier to balance the budget on those big hits.”

The Redford government is trying to deal with lower-than-expected oil prices and a deep discount for Alberta oilsands crude, trends that are battering revenue projections.

This year’s projected $886-million deficit has ballooned to more than $3 billion, and the Tory campaign promise to balance the books in 2013 is looking increasingly unlikely to occur.

Horner and Redford have said they will look at borrowing to finance capital projects next year to ensure continued infrastructure development in a time of economic and population growth.

AUMA president Linda Sloan said the total funding for municipalities — which provide core services to all Albertans — is just a small part of the $40-billion provincial budget.

“The realities for municipalities haven’t changed. They haven’t changed since the provincial election,” said Sloan, an Edmonton city councillor.

“The expectations are what they were following the election, that we would see the premier make good on her commitment to build a new relationship with municipalities.”

Bob Barss, president of the Alberta Association of Municipal Districts and Counties, said his organization has been told the promise of increased funding for MSI still stands, but the government is in cost-cutting mode.

“If it was a freeze, the impact would be minimal. If there was a reduction, depending on where it’s at, it could be significant,” he said.

“There’s a lot of plans in place based on that money ... if that money was reduced it would have a huge impact on rural Alberta.”

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